Mellanox Completes Acquisition of EZchip

Mellanox Technologies, Ltd. completed the acquisition of EZchip Semiconductor Ltd., in high-performance processing solutions for carrier and data center networks, at a total purchase price of approximately $811 million (approximately $606 million net of cash).

Effective today, each outstanding share of EZchip ordinary shares shall be deemed to have been transferred to Mellanox, entitling the holder thereof to receive $25.50 in cash without interest and less any applicable withholding taxes. Following the merger, EZchip shares ceased to be traded on the NASDAQ and Tel-Aviv Stock Exchanges.

The EZchip acquisition is a further step in Mellanox’s strategy to become the broad-line supplier of intelligent interconnect solutions for the data center. The combined company will deliver diverse and robust solutions, enabling customers to meet growing demands of data-intensive applications used in high-performance computing, Web 2.0, cloud, network security, data center, enterprise, telecom, database, financial services and storage environments.

“As our largest ever acquisition, we are confident the integrated teams of EZchip and Mellanox can deliver future value to our shareholders,” said Eyal Waldman, president and CEO, Mellanox. “We look forward to working together as a combined company building a leading intelligent, end-to-end interconnect, and network processing company. This will enable Mellanox to add intelligence, and application offloads to the interconnect, which is a trend we are seeing in data centers, and expect to take dominant share in this transition.“

In connection with the transaction, J.P. Morgan Securities LLC acted as exclusive financial adviser, and provided a financing commitment to Mellanox, and Herzog Fox & Neeman and Latham & Watkins LLP acted as Mellanox’s legal counsel.

Updated 1Q16 Guidance (including 5-weeks of EZchip contribution)

Quarterly revenues of $190 million to $195 million
Non-GAAP gross margins of 71% to 72%
An increase in non-GAAP operating expenses of 8% to 10%
Share-based compensation expense of $13.8 million to $14.3 million
Non-GAAP diluted share count of 48.7 million to 49.2 million shares.

Read also:
Mellanox Reaffirms Offer for EZchip at $25.50 Per Share in Cash
Premium of 16%
2015.11.16 | Press Release
EZchip Recommends Approval of Merger Proposal With Mellanox
And against election of Raging Capital Master Fund’s two nominees to board
2015.10.27 | Press Release
Mellanox Acquiring EZchip for $811 Million …
In high-performance processing solution for carrier and data center networks
2015.10.02 | Press Release